Currently, the energy landscape is transforming as Governments around the world aim to decarbonise their economies in the interests of combating climate change by implementing renewable generators and considering new technologies to assist the intelligent use of energy. The importance of reassessing the way in which the world generates and uses electricity to provide a more sustainable and less polluted future is underpinned by every country in the world, with the exception of the USA, signing the Paris Climate Agreement to limit climate change. However, despite the necessity of efforts to decarbonise, security of supply is experiencing turbulence and businesses are at risk of interruption as the energy transition progresses. This is due to the overall increased demand, changes to the way in which we consume energy and, particularly within the UK, due to its centralised energy network.The condition of healthcare in the UK
In this Industry Insight, Powerstar will summarise the disruptive effect of the energy transition with a focus on the healthcare sector, including:
- The issues facing the healthcare industry in the UK
- The benefits of energy storage in the healthcare industry
The issues facing the healthcare industry in the UK
Earlier this year, Centrica Business Solutions published a report which highlights the issues facing the UK’s healthcare industry throughout the transition of the energy network. The report – Powering the future of healthcare – discussed findings from a survey conducted by Centrica alongside other research into the energy needs of the UK’s healthcare industry. According to the report, many issues facing the healthcare industry are characterised by the finding that “many healthcare providers see energy as a commodity over which they have little control”. If healthcare providers continue to view energy in this way then the opportunities available during the energy transition and Industry 4.0 could be missed.
The simultaneous development of the energy transition towards a decentralised and decarbonised system, and the rise of connectivity within industry is set to afford an opportunity for end users to not only have more control over the efficient use of their energy but also provide visibility and monitoring of energy and connected assets to achieve a holistic smart energy system. Such advances in connectivity, which could allow the healthcare industry to develop a much cleaner, more sustainable, and cost-effective way of managing energy and help the UK Government achieve its legally binding target of an 80% reduction in carbon emissions by 2050, based on 1990 levels, are sadly unlikely to be acted upon should the aforementioned viewpoint from the Centrica report persist.
The requirement for the healthcare industry to adopt further methods to enhance the smart use of energy and ultimately reduce consumption and emissions is apparent. This is being driven by the Government, and the healthcare industry is already showing an appetite for the smart use of energy, with the announcement earlier this year that a portion of £150 million budgeted to support the NHS’s work to become more efficient will be used to enable the more efficient use of energy in hospitals. Additionally, adopting a new attitude and strategy towards the smart and efficient use of energy will provide additional benefits such as significant cost savings, this is highlighted by the report which found that the UK’s National Health Service (NHS) currently spends £500M on energy per year6
Issues that the healthcare industry is facing with regards to security of supply, or energy resilience, are highlighted by responses to Centrica’s survey within the Powering the future of healthcare report, that 46% of healthcare respondents stated that their organisation had suffered an interruption to the energy supply due to external factors in the last 12 months. This threatens to disrupt the healthcare industry as it relies on a constant supply of energy to carry out critical day-to-day activities. Additionally, 77% of healthcare respondents agreed that the cost of implementing an energy resilience strategy is far less than the impact of an energy failure6. Whilst details of the impact of such an occurrence are not expanded upon, due to the sensitive operations of healthcare facilities it goes without saying that interruptions could cause severe disruption on a wide scale and have the potential to affect patient satisfaction and even patient safety, depending on the degree and length of the energy failure.
This survey clearly outlines that maintaining a reliable energy supply at all times is essential to ensure that the needs of patients are met and the quality of healthcare can be maintained. It is well-known that healthcare facilities support their most vital equipment with system specific UPS’s. However, due to the increasing frequency and sensitivity of equipment, those serious about energy resilience will be forced to examine a more complete and robust form of back-up. One such solution could be implementing a site-wide Uninterruptible Power Supply (UPS) integrated into an energy storage solutions to provide a rapidly responding and self-sufficient form of back-up, whilst allowing sites to phase out slower responding and less clean back-up sources, such as diesel generators. Leading energy storage solutions such as Powerstar’s VIRTUE, can support the load (which can be site-wide) within 9 milliseconds meaning that an energy failure would go unnoticed if the solution was implemented.
Due to the challenges highlighted of the requirement for security of supply, decarbonisation and cost savings, the healthcare industry is an area in which the widespread adoption of modern energy efficiency technologies, such as energy storage with full Uninterruptible Power Supply (UPS) capabilities, could have a significant impact, offering a solution to the trilemma and enabling healthcare providers to boost their energy efficiency and resilience. The actual quantifiable benefits are explained in the following section.
The benefits of energy storage in the healthcare industryEnergy resilience could boost patient care
As briefly covered within the previous section, energy storage solutions provide a plethora of benefits so it’s easy to see why energy storage is a growing technology, with installed capacity by the end of 2022 predicted to be 50 times that of 2017 .
Tackling the first of the points raised within the trilemma, the cost saving aspects of energy storage are perhaps its most well-known benefits, and are applicable to any industry. Cost savings mainly arise from peak shaving and Triad avoidance. Peak shaving is the process of minimising the Distribution Use of System (DUoS) charges which is achieved by storing energy during off/mid-peak DUoS periods when energy prices are lowest, and using this stored energy during peak DUoS periods, instead of taking energy from the grid at the time of highest demand and therefore cost. Triads, on the other hand are the three half-hour settlement periods with the highest system demand between November and February, separated by at least ten clear days. Avoiding Triads is achieved by using the energy stored within the asset instead of drawing power from the grid during the three peak periods in the winter months, therefore reducing the use of the transmission system and lowering the Triad cost. Whilst the level of savings vary depending on geographical locations, such cost savings could contribute towards the NHS achieving its target of almost £22 billion of savings across all departments by 20206.
In addition to the cost saving aspect of energy storage, the energy resilience benefits it can provide are vital within the healthcare industry where the quality of patient care could be interrupted by energy-related failures, which are increasing due to aforementioned factors in addition to renewable energy, which is intermittent by nature, becoming a larger share of the energy mix. Energy storage with UPS capabilities also offers the healthcare industry the opportunity to enhance revenues which could then be reinvested towards further increasing the quality of patient care as in some cases, the UPS capabilities of leading-edge storage technologies such as Powerstar VIRTUE, can provide over 10% of the financial benefit of the solution over a 15 year period. This increase in revenues could lead to a marked improvement in patient care, both operationally and at research level.
Another benefit of energy storage is that it can be integrated with existing technologies such as solar (PV) and Combined Heat and Power (CHP) to further improve the efficacy of existing energy efficient technologies. This is particularly relevant in the healthcare industry as the Centrica report found that 16% of respondents already have CHP installed at most sites and included a case study of a CHP installation at the Royal Stoke University Hospital, which has produced annual savings of £500,000 and saved 2,800 tonnes of carbon. Energy storage can further optimise this technology as the operation of CHP systems can often vary due to the energy needs of the site, which can result in over-generation. Energy storage would provide the capacity to store this over-generation for use when required, further reducing wasted energy. Plus, by integrating energy storage technology with renewable generation, the intermittency inherent in renewable energy, such as solar and wind which rely on certain weather conditions, can be negated by storing the energy for later use. This would support the introduction of more renewable energy into the energy mix, creating a significant reduction in energy costs if it was to be applied across local NHS facilities nationwide as these facilities would be able to circumvent the costly charges associated with taking energy from the grid at peak times.
Lastly, the environmental benefits that energy storage can provide through significant reductions in energy consumption, and therefore carbon emissions, offers another incentive for healthcare providers as the NHS is currently the most significant public-sector contributor to climate change in the UK, with the NHS in England being responsible for around 20 million tonnes of carbon dioxide emissions annually. As a national service that is constantly under the microscope, the decarbonisation of the NHS will be high on the Government’s agenda, and it will take steps to ensure that the NHS is decarbonised in order to meet climate change targets and support efforts in maintaining corporate social responsibility and achieving carbon neutrality
It is apparent that the healthcare industry in the UK is currently making efforts to decarbonise and implement a smart energy strategy, but these efforts could require acceleration if the industry is to overcome the problems it currently faces and achieve the necessary cost savings, whilst also improving environmental sustainability and maintain the high quality of care. The widespread adoption of energy storage could provide the healthcare industry with the tools necessary to modernise the way it uses energy, whilst granting greater control and help to meet the ambitious Governmental objectives to reduce carbon emissions.
The widespread implementation of a complete, leading-edge energy storage solution, such as Powerstar VIRTUE, could be a strong next step for the healthcare industry in negotiating the energy transition. This could also provide the groundwork for further optimisations in the future as it can be integrated with complementary energy efficiency technologies such as solar and CHP.
 Centrica Business Solutions – Powering the future of healthcare